The State of Ohio approved the sale of Summa Health to General Catalyst, a venture capital firm. HealthExec reported:
It’s not entirely clear how business operations at Summa Health, a nonprofit, will change.General Catlyst's CEO made it clear Summa would be the venue for its healthcare AI and other related services provided by fellow GC affiliates. A press release referred to its "Silicon Valley's innovation engine." Yes, the engine that includes intellectual property theft and replaces people with chatbots prone to hallucination, when not providing "garbage out" from "garbage in." GC just put another $200 million into healthcare AI affiliate Commure.
VC's tend to swing harder for the fences than private equity underwriters (PEU). The disaster of Massachusetts' Steward Healthcare under Cerberus Capital Management ownership was chronicled over a decade (Forbes). A similar but much faster implosion occurred at Hahnemann Health in Philadelphia under Paladin Healthcare Capital (New Yorker).
The Carlyle Group, a politically connected PEU, sank ManorCare, a giant nursing home chain. It did so under the watchful eye of former Medicare Chief Gail Wilensky.
Summa will be ground zero for the transformation of "healthcare as medicine" to "healthcare as software", no doctor needed.
Not mentioned in any article are the equity stakes Summa executives will obtain when the nonprofit switches over to a for-profit. That conflict of interest is rarely identified prior to any takeovers. It arose with Steward over time as several dividend bleedings sent big money to CEO Ralph de la Torre, M.D.
How can this happen yet again? Politicians Red and Blue love PEU (and their new TechGod brethren), and increasingly, more are one.
I encourage Summa Health staff to buckle up. VC firms operate their mechanical bull at level 10, while PEUs tend to be at level 8. That means more bullshit slung and at greater distances. Duck if you see Commanure flying at you.
